The graph below shows revenue vs assets over 4 years in ZW$ bns
Harare- Diversified technological group, EcoCash Holdings Zimbabwe Limited narrowed after tax loss incurred during the half-year ended 30 September 2022 by a whopping 81% to ZW$506 million from ZW$2.6 billion registered in 2021 comparative period.
The group’s profit began flopping in 2020 before it rebranded to EcoCash Holdings in 2022, mainly affected by the COVID-19 pandemic and retrogressive monetary policies by the finance gaffers. These were hyped by government's interference within EcoCash business when it accused it for fuelling black market activities resulting in over 50 000 EcoCash mobile money agents and thousands of merchants to discontinue cash-in and cash-out services. Government continued tightening EcoCash operations through putting unconvincing caps on daily and monthly transfer limits.
The graph below shows half year profit performance between 201-2022 in ZW$ bns
Since then, the Group’s performance had been faltering. Since 2020, EcoCash has lost over 3 million subscribers mainly due to government’s aggressive monetary measures to tame inflation and restore currency confidence.
However, the Group continues to leverage on the technological innovations to restore its legacy, particularly within the flagship assets, EcoCash and Steward Bank. During the period under review, through the mobile money business, Ecocash Bill Manager, a platform that aggregates service providers and allows customers to conveniently pay their bills was launched.
The platform has already attracted over 200 000 customers.
“EcoCash Holdings continues to see exciting opportunities in the market for social and financial inclusion through technology,” the Group’s chairperson Miss Sherree Sherini said in a statement accompanying the half-year financials.
Building on the success of the first phase of its digital transformation “Purple Ark,” Steward Bank continued the journey with the commencement of the second phase of the upgrade.
The Group reviewed the second phase will see an increased automation and digitalisation of the Bank’s systems and processes as well as enhanced capacity to launch new banking innovations. The Bank also further enhanced its digital products offering through the revamp of the low Know-Your-Customer (KYC) I-Save accounts platform.
“Following the revamp, we managed to on-board 234 000 customers on iSave accounts and achieved a 10% reduction in mobile banking registration queries,” Shereni said.
“We have continued to build around the core life and short-term insurance products for the Insurtech business focusing on expanding our channel network to enhance service delivery and experience across all our insurance products.”
Meanwhile, despite profit tumbling, revenue for the Group increased to ZW$45.4 from ZW$42.5 in HY’2021, reflecting a 7% increase. In 2021, revenue registered a 21% increase meaning the economic environment is moving from bad to worse against what the government is saying.
Exorbitant corporate taxes, hawkish monetary and fiscal policies and government interference through statutory instruments has made the operating environment a battleground for the fittest.
The Fintech business, anchored by EcoCash and Steward Bank, remains the largest contributor with performance being driven by new product innovations, and growth in the banks’ forex revenue, a result of the deliberate growth in the USD loan book and foreign currency accounts.
Foreign exchange losses arising from debenture related liabilities spiked by over 6000% to ZW$17 billion from ZW$276 million while finance costs increased by 21% to ZW$793 million from ZW$654 million during the comparative period. During the period from January to September 2022, the local currency succumbed by over 70% on the formal market while more than doubling on the parallel market.
Other expenses rose to ZW$10 billion from ZW$605 million.
Going forward, Shereni said, “We are making a lasting difference by empowering people through reliable and resilient digital solutions that enhance people’s ability to be economically active and we look forward to contributing towards sustained innovations in the Fintech, Insurtech, Healthtech, Agritech and On Demand Services space, which we believe we can accelerate, spurred by the gains recorded in the current period.”
She added that, “Despite the environmental headwinds and volatile operating environment, EcoCash Holdings is committed to build upon the successes of the past and to continue delivering value for all our stakeholders.”
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